Financial strategies for minimizing corporate income taxes under Brazil's new global tax system

In 1996, Brazil adopted a worldwide income tax system for corporations. This system represents a fundamental change in how the Brazílian government treats multinational transactions and the tax minimizing strategies relevant to businesses. In this article, we describe the conceptual basis for worldwide tax systems and the problem of double taxation that they create. Responses to double taxation by both the governments and the priva te sector are considered. Namely, the imperfect mechanisms developed by Brazil and other countries for mitigating double taxation are analyzed. We ultimately focus on the strategies that companies utilize in order not only to avoid double texetion, but also to take advantage of tax havens.

International transfer pricing restrictions: impact on corporate financial policy

Transfer pricing is a pervasive issue that presents significant tax savings potential concerning international enterprises. The authors discuss company incentives to manage transfer prices in an article appearing in the preceding issue of this journal. In response to these incentives, governments have increasingly enacted and enforced domestic restrictions on transfer prices. In this article, contemporary norms restricting transfer pricing are analyzed. The OEGO and US pricing standards are assessed and Brazil's recent application of these standards is considered. Transfer pricing methods are described and evidence of their use is presented. We conclude by describing an intercompany transfer pricing policy intended to facilitate internaI financiaI management and minimize externaI tax threats.

ANTECEDENTS AND CONSEQUENCES OF HOUSEHOLD FINANCIAL MANAGEMENT IN BRAZILIAN LOWER-MIDDLE-CLASS

Through two complementary and exploratory studies – one qualitative and one quantitative – this research aims to understand the ways in which lower-middle-class families in Brazil manage their household finances. The study proposes an integrated framework that brings together various previously disconnected theoretical fragments. Based on a survey with a sample of 165 lower-middle-class female consumers of a retail company in São Paulo, we explored and tested, via a quantitative study, how antecedents such as personal characteristics affect the financial management process, as well as its consequences, either negatively as defaults or positively as savings. The model calibration and analysis were derived from a series of regression analyses. The results revealed the mediator role that financial management plays in the relationship between personal characteristics and defaults and savings. Compared to previous studies with consumers of more affluent countries, we identified peculiar findings among Brazilian lower-middle-class consumers: inadequate attention to control, weak or no focus on short- or long-range planning, widespread absence of budget surplus, and influence of critical events on episodes of default.

CROSS-COUNTRY STUDY ON THE DETERMINANTS OF BANK FINANCIAL DISTRESS

ABSTRACTBank failures affect owners, employees, and customers, possibly causing large-scale economic distress. Thus, banks must evaluate operational risks and develop early warning systems. This study investigates bank failures in the Organization for Economic Co-operation and Development, the North America Free Trade Area (NAFTA), the Association of Southeast Asian Nations, the European Union, newly industrialized countries, the G20, and the G8. We use financial ratios to analyze and explore the appropriateness of prediction models. Results show that capital ratios, interest income compared to interest expenses, non-interest income compared to non-interest expenses, return on equity, and provisions for loan losses have significantly negative correlations with bank failure. However, loan ratios, non-performing loans, and fixed assets all have significantly positive correlations with bank failure. In addition, the accuracy of the logistic model for banks from NAFTA countries provides the best prediction accuracy regarding bank failure.

CORPORATE SOCIAL RESPONSIBILITY AND FINANCIAL PERFORMANCE: THE SPANISH CASE

ABSTRACT The enormous interest aroused by corporate social responsibility both in the academic and the business worlds forms the background for this study. Its objective is to analyze the relationship between corporate social responsibility and financial performance in view of the debate in the literature on the subject. The study focuses on a sample of Spanish companies taken from the IBEX 35 stock market index, using panel data methodology, which offers advantages in comparison to methodologies used in other studies. We analyzed the period from 2003 to 2010. Our findings suggest that there is no obvious relationship between corporate social responsibility and financial results, at least in the case of Spain.

Stressful working conditions and poor self-rated health among financial services employees

OBJECTIVE: To assess the association between exposure to adverse psychosocial working conditions and poor self-rated health among bank employees. METHODS: A cross-sectional study including a sample of 2,054 employees of a government bank was conducted in 2008. Self-rated health was assessed by a single question: "In general, would you say your health is (...)." Exposure to adverse psychosocial working conditions was evaluated by the effort-reward imbalance model and the demand-control model. Information on other independent variables was obtained through a self-administered semi-structured questionnaire. A multiple logistic regression analysis was performed and odds ratio calculated to assess independent associations between adverse psychosocial working conditions and poor self-rated health. RESULTS: The overall prevalence of poor self-rated health was 9%, with no significant gender difference. Exposure to high demand and low control environment at work was associated with poor self-rated health. Employees with high effort-reward imbalance and overcommitment also reported poor self-rated health, with a dose-response relationship. Social support at work was inversely related to poor self-rated health, with a dose-response relationship. CONCLUSIONS: Exposure to adverse psychosocial work factors assessed based on the effort-reward imbalance model and the demand-control model is independently associated with poor self-rated health among the workers studied.

Effects of water deprivation on renal hydroelectrolytic excretion in chronically Trypanosoma cruzi-infected rats

The effect of an 8 hour-period of water deprivation on fluid and electrolyte renal excretion was investigated in male Wistar rats infected with the strain São Felipe (12SF) of Trypanosoma cruzi, in comparison with age and sex matched non-infected controls. The median percent reductions in the urinary flow (-40% v -63%) and excretion ofsodium (-57% v-79%) were smaller in chagasic than in control rats, respectively. So, chagasic rats excreted more than controls. On the other hand, the median percent decrement in the clearance of creatinine was higher in chagasic (-51%) than in controls (-39%). Thus, chagasic rats showed some disturbed renal hydroelectrolytic responses to water deprivation, expressed by smaller conservation, or higher excretion of water and sodium in association with smaller glomerularfiltration rate. This fact denoted an elevation in the fractional excretion of sodium and water.

The Effect of Sleep Deprivation on Cardiac Function and Tolerance to Ischemia-Reperfusion Injury in Male Rats

Abstract Background: Sleep deprivation (SD) is strongly associated with elevated risk for cardiovascular disease. Objective: To determine the effect of SD on basal hemodynamic functions and tolerance to myocardial ischemia-reperfusion (IR) injury in male rats. Method: SD was induced by using the flowerpot method for 4 days. Isolated hearts were perfused with Langendorff setup, and the following parameters were measured at baseline and after IR: left ventricular developed pressure (LVDP); heart rate (HR); and the maximum rate of increase and decrease of left ventricular pressure (±dp/dt). Heart NOx level, infarct size and coronary flow CK-MB and LDH were measured after IR. Systolic blood pressure (SBP) was measured at start and end of study. Results: In the SD group, the baseline levels of LVDP (19%), +dp/dt (18%), and -dp/dt (21%) were significantly (p < 0.05) lower, and HR (32%) was significantly higher compared to the controls. After ischemia, hearts from SD group displayed a significant increase in HR together with a low hemodynamic function recovery compared to the controls. In the SD group, NOx level in heart, coronary flow CK-MB and LDH and infarct size significantly increased after IR; also SD rats had higher SBP after 4 days. Conclusion: Hearts from SD rats had lower basal cardiac function and less tolerance to IR injury, which may be linked to an increase in NO production following IR.

Effects of intraspecific competition and food deprivation on the immature phase of Ascia monuste orseis (Lepidoptera, Pieridae)

The effect of intraspecific competition for food on larvae and of food deprivation for 24 h on 2nd and 4th instars of Ascia monuste orseis (Godart, 1819) was investigated. Intraspecific competition for food during the immature phase leads to long pupation time, high larval mortality, reduced adult weight, and reduced number of eggs per female. In food deprivation experiments, the major differences in A. monuste orseis performance were long pupation time in the group that was deprived during the 2nd instar; and a negative effect on reproduction in the group that was deprived during the 4th instar, with reduced adult weight. Both food deprived periods tested are critical, and deprivation during the 2nd instar seems to have an effect as drastic as during the 4th instar because it directly affects larvae survival. Immatures can resist food deprivation for 24 h during the 2nd and 4th instars (low mortality), have a compensatory behaviour (high ingestion and biomass gain) during the 5th instar, and do not demonstrate cannibalistic behaviour during food deprivation.

Oviposition behavior of Zabrotes subfasciatus females (Coleoptera, Bruchidae) under conditions of host deprivation

Oviposition of Zabrotes subfasciatus (Boheman, 1833) on Phaseolus vulgaris (Linnaeus, 1753) was studied immediately after emergence of the adults throughout the females life and in situations of host deprivation lasting for 1 to 10 days. The number of eggs laid daily, longevity, duration of oviposition and distribution of eggs per grain were studied. The number of eggs laid per day varied significantly, with the oviposition peak in the presence of the host (control group) occurring between day 2 and day 5 of oviposition. In the absence of the host, a shift in the oviposition peak to the first day after deprivation was observed, except for the group deprived for one day which showed a peak between days 1 and 4 after introduction of the host. The distribution of the eggs per grain in the control group and in the groups deprived of the host for 2, 5, 8 and 10 days, a larger egg aggregation was observed for all deprived groups compared to the control group.

Estimated Financial Impact of Trypanosoma vivax on the Brazilian Pantanal and Bolivian Lowlands

The financial impact of the first outbreak of Trypanosoma vivax in the Brazilian Pantanal wetland is estimated. Results are extended to include outbreaks in the Bolivian lowlands providing a notion of the potential influence of the disease and an analytical basis. More than 11 million head of cattle, valued at more than US$3 billion are found in the Brazilian Pantanal and Bolivian lowlands. The total estimated cost of the 1995 outbreak of T. vivax is the sum of the present values of mortality, abortion, and productivity losses and treatment costs, or about 4% of total brood cow value on affected ranches. Had the outbreak gone untreated, the estimated losses would have exceeded 17% of total brood cow value.

Dynamics of evolution and resistance to starvation of Triatoma vitticeps (Stal 1859) (Reduviidae: Triatominae), submitted to two different regimens of food deprivation

The resistance to starvation of Triatoma vitticeps has been analyzed comparatively, according to different regimens of food deprivation under laboratory conditions. One cohort, composed of 100 specimens of each evolutionary nymphal stage, was submitted to continuous fasting until death; the second group, arranged in the same way, was fed once on chicken. Through this work, it was possible not only to compare the results obtained from the first group with other authors' results but, also, to analyze the dynamics of evolution, molting, longevity and the increase in insect longevity, in the second group. The average values recorded for survival time revealed statistical differences between the two groups. Among the important results detected, there is one that deserves to be emphasized: the incredible increase in longevity among insects that received only one feed - an average increase in survival time that reached 2.95 to 3.30 times in nymphs of 3rd and 4th stages, respectively. One 5th stage nymph survived for up to 350 days and the females may triplicate their survival rate, what represents an important epidemiological factor. The knowledge about this type of biological characteristic of T. vitticeps may contribute to prevent the domiciliation of this species, what seems to be incipient in some municipal districts, in Brazil.

Analysis of multi-scale systemic risk in Brazil's financial market

This work analyzes whether the relationship between risk and returns predicted by the Capital Asset Pricing Model (CAPM) is valid in the Brazilian stock market. The analysis is based on discrete wavelet decomposition on different time scales. This technique allows to analyze the relationship between different time horizons, since the short-term ones (2 to 4 days) up to the long-term ones (64 to 128 days). The results indicate that there is a negative or null relationship between systemic risk and returns for Brazil from 2004 to 2007. As the average excess return of a market portfolio in relation to a risk-free asset during that period was positive, it would be expected this relationship to be positive. That is, higher systematic risk should result in higher excess returns, which did not occur. Therefore, during that period, appropriate compensation for systemic risk was not observed in the Brazilian market. The scales that proved to be most significant to the risk-return relation were the first three, which corresponded to short-term time horizons. When treating differently, year-by-year, and consequently separating positive and negative premiums, some relevance is found, during some years, in the risk/return relation predicted by the CAPM. However, this pattern did not persist throughout the years. Therefore, there is not any evidence strong enough confirming that the asset pricing follows the model.

U.S. subprime financial crisis contagion on BRIC and European Union stock markets

ABSTRACTThe Copula Theory was used to analyze contagion among the BRIC (Brazil, Russia, India and China) and European Union stock markets with the U.S. Equity Market. The market indexes used for the period between January 01, 2005 and February 27, 2010 are: MXBRIC (BRIC), MXEU (European Union) and MXUS (United States). This article evaluated the adequacy of the main copulas found in the financial literature using log-likelihood, Akaike information and Bayesian information criteria. This article provides a groundbreaking study in the area of contagion due to the use of conditional copulas, allowing to calculate the correlation increase between indexes with non-parametric approach. The conditional Symmetrized Joe-Clayton copula was the one that fitted better to the considered pairs of returns. Results indicate evidence of contagion effect in both markets, European Union and BRIC members, with a 5% significance level. Furthermore, there is also evidence that the contagion of U.S. financial crisis was more pronounced in the European Union than in the BRIC markets, with a 5% significance level. Therefore, stock portfolios formed by equities from the BRIC countries were able to offer greater protection during the subprime crisis. The results are aligned with recent papers that present an increase in correlation between stock markets, especially in bear markets.